Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. All dollar amounts and share counts presented below have been rounded to the nearest thousand and, thus are approximate. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and expected financial results, includes forward-looking statements that involve risks and uncertainties. You should review the section titled "Forward-Looking Statements" and the risks described in Part I, Item 1A Risk Factors and elsewhere in this Annual Report.

Overview

We are a provider of genome analysis solutions that can enable researchers and clinicians to reveal answers to challenging questions in biology and medicine. Our mission is to transform the way the world sees the genome through OGM solutions, diagnostic services and software. We offer OGM solutions for applications across basic, translational and clinical research, and for other applications including bioprocessing. We offer a platform-agnostic software solution, which integrates next-generation sequencing, microarray and OGM data designed to provide analysis, visualization, interpretation and reporting of copy number variants, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view. The Company also offers nucleic acid extraction and purification solutions using proprietary isotachophoresis ("ITP") technology. Through our Bionano Laboratories business, we also provide OGM-based diagnostic testing services.

We expect to see OGM adoption in cytogenomics, in discovery research and in cell and gene therapy applications. Within cytogenetics and molecular pathology, we estimate that there are approximately 10,000 cytogenetic labs on a worldwide basis (excluding India and developing countries). We estimate that these labs analyze approximately 10.0 million samples per year. Additionally, we estimate that approximately 1,400 pharmaceutical and biotech companies are engaged in research and development of various cell therapies that rely on methods, including cytogenetics. Based on these estimates, we believe the economic potential for OGM in these markets is approximately $10.0 billion annually, $3.0 billion of which we attribute to cell and gene therapy applications. We believe there are additional potential future market opportunities for OGM to streamline workflows, reduce the number of technologies required to deliver results, lower costs, and improve findings in the broader pathology market across multiple subdisciplines including newborn screening, population genomics, and neurological and cardiological risk assessment which are not included in our estimates above. Additionally, we believe the market for our platform-agnostic software solution, which can be used in next-generation sequencing and microarray data analysis, includes the clinical NGS market which The Business Research Company has estimated at approximately $4.1 billion in 2025 and predicted would grow to approximately $8.2 billion in 2029, representing a compound annual growth rate of 18.8%.

Recent Highlights

Commercial Adoption of Offerings for OGM Systems

In executing on our commercialization strategy, we expanded the utilization of our OGM systems (our Saphyr system and our Stratys system) and:

Macroeconomic and Geopolitical Developments

We are subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic developments, such as recent and potential future bank failures, the ongoing international conflicts, related sanctions, any effects of global pandemics and uncertain market conditions, including inflation and supply chain disruptions, and international trade policies (including trade protection measures, such as tariffs, sanctions and other trade barriers), changes in monetary and fiscal policy, United States political developments and other sources of instability, which have not had a material impact on our business and financial results to date, but could result in a material impact to our business or financial results in the future. Additionally, we have experienced a slowdown in our Asia Pacific business, including as a result of headwinds in the region, which negatively impacted our manufacturing partners who are reliant on government funding. While our manufacturing partners in the Asia Pacific region have obtained some approvals from the National Medical Products Administration, and are waiting on more, we do not anticipate that the funding headwinds will change in the near term.

We closely monitor and comply with various applicable guidelines and legal requirements in the jurisdictions in which we operate. In the past, we have experienced supply chain challenges, attributable to such adverse geopolitical and macroeconomic developments including increased costs to secure certain component parts in our products and to produce our products at our contract manufacturers. During the year ended December 31, 2025, we did not experience material increases in our supply chain costs, but we may experience such increases in future fiscal periods. We expect our costs to remain high for the foreseeable future. As global economic conditions recover, business activity may not recover as quickly as anticipated, and it is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. For instance, product demand may be reduced due to an economic recession, a decrease in corporate capital expenditures, prolonged unemployment, high inflation rates, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic developments, or any similar negative economic condition. These negative effects could have a material impact on our operations, business, earnings, and liquidity.

Recent Developments

During 2025, the Company operated under an agreement with its instrument contract manufacturer under which it made weekly deposits for future inventory purchases that began in April 2025 and continued through November 21, 2025. Total payments in 2025 were $1.9 million. The payments created a deposit for inventory Bionano purchased above the 2025 minimum order quantity and guaranteed the availability of certain raw materials previously purchased by the contract manufacturer to build instruments. See Note 11 (Commitments and Contingencies - Purchase Commitments) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for additional information.

Financial Overview

Revenue

We generate product revenue from sales of our OGM and Ionic Purification systems and consumables, which includes our instruments, and our VIA software. VIA software is our replacement to our NxClinical software. Like NxClinical, VIA has a simple integrated workflow for visualization, interpretation and reporting of NGS and microarray data. VIA

additionally incorporates OGM data to that workflow creating a standard software tool for use across molecular pathology and cytogenomics applications. We currently sell our systems for research use only applications and our customers are primarily laboratories associated with academic and governmental research institutions, academic and commercial clinical laboratories, as well as pharmaceutical, biotechnology and contract research companies. In addition, we provide instruments to certain customers at no cost under our reagent rental program, and the customers agree to purchase minimum quantities of consumables. Consumable revenue consists of sales of reagents and chips necessary to process a sample. Sales of our VIA software, which provides customers with solutions for analysis, interpretation and reporting of genomics data, are made on a subscription basis. We generate service revenue from the sale of diagnostic testing services through Bionano Laboratories, as well as services performed related to customer sample evaluations using an OGM system. Other revenue consists of warranty and other service-based revenue, including support, repair and maintenance services.

The following table presents our revenue for the periods indicated:

The following table reflects total revenue by geography and as a percentage of total revenue, based on the billing address of our customers. Americas consists of North America and South America. EMEA consists of Europe, the Middle East and Africa. Asia Pacific includes China, Japan, South Korea, Singapore, India and Australia.

Cost of Revenue

Cost of product revenue for our systems and consumables includes raw material parts costs and associated freight, shipping and handling costs, contract manufacturing costs, salaries and other personnel costs, equipment depreciation, overhead and other direct costs related to those sales recognized as product revenue in the period. Cost of service and other revenue consists of third-party laboratory costs to process the diagnostic samples, salaries of our clinical technicians who interpret and deliver the results to patients, warranty services, and other costs of servicing equipment at customer sites.

Research and Development Expenses

Research and development expenses consist of salaries and other personnel costs, stock-based compensation, research supplies, third-party development costs for new products, materials for prototypes, equipment depreciation, and allocated overhead costs that include facility and other overhead costs. We have made substantial investments in research and development since our inception. Our research and development efforts have focused primarily on the tasks required to support development and commercialization of existing products. We believe that our continued investment in research and development is essential to our long-term competitive position.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of salaries and other personnel costs, amortization expense related to acquired intangibles, and stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well as professional services, such as legal and accounting services.

Results of Operations

We have incurred losses in each year since our inception. Our net loss was $26.4 million and $112.0 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $719.6 million.

We expect to continue to incur significant expenses and operating losses as we:

Accordingly, based on recurring losses from operations incurred since inception, the expectation of continued operating losses, and the need to raise additional capital to finance our future operations, we determined that there is substantial doubt about our ability to continue as a going concern within 12 months after the date that the financial statements included in this Annual Report are issued.

We will continue to seek to raise additional capital, but without sufficient additional financing in the near term we will not be able to continue as a going concern. If we are unable to continue as a going concern, we may have to reorganize or liquidate our business and may receive less than the value at which those assets are carried on our consolidated financial statements, and investors may lose all or a part of their investment. From time to time, the board of directors maintains a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof: debt financing, equity investments, combinations with other companies, or the sale of all or part of the company. There can be no assurances that any transactions will be available to us or completed and if we are not able to raise sufficient additional capital in the very near term to fund our operation, we mayseek relief available under applicable insolvency laws. We do not intend to make further announcements regarding this process unless and until the board of directors approves a specific transaction or otherwise determines that further disclosure is appropriate.

Comparison of the Years Ended December 31, 2025 and 2024

The following table sets forth our results of operations for the years ended December 31, 2025 and 2024:

Revenue

Total revenue decreased by $2.3 million, or 7%, to $28.5 million for the year ended December 31, 2025, as compared to $30.8 million for the same period in 2024, driven primarily by a decrease in service and other revenue.

Instrument revenue decreased by $1.7 million, or 21%, to $6.4 million for the year ended December 31, 2025, as compared to $8.0 million for the year ended December 31, 2024, due to a decrease in the number of OGM and Ionic® instruments sold. For the year ended December 31, 2025, our installed base grew to 387 OGM systems compared to the 371 OGM systems for the year ended December 31, 2024, which represented a 4% increase year-over-year as compared to a 14% year-over-year increase in the prior year. In September 2024, we announced a change in our business strategy to focus on driving utilization and adoption of OGM from our existing installed base, with less emphasis on new placements of our OGM systems. We expected that this change in strategy would slow the pace of

our instrument revenue growth when compared to historical growth rates, and we anticipate that the reduced pace will continue into 2026.

Consumables revenue increased by $1.2 million, or 9%, to $14.0 million for the year ended December 31, 2025, as compared to $12.8 million for the year ended December 31, 2024. The increase is primarily driven by an increase in average selling price of flowcells sold, partially offset by certain supply constraints due to manufacturing delays in the fourth quarter of 2025.

Software revenue increased by $0.2 million, or 4%, to $6.4 million for the year ended December 31, 2025, as compared to $6.2 million for the year ended December 31, 2024. The increase is primarily attributed to an increase in the number of VIA software licenses sold.

Service and other revenue decreased by $2.0 million, or 53%, to $1.8 million for the year ended December 31, 2025, as compared to $3.8 million for the year ended December 31, 2024. The decrease was primarily due to the discontinuation of certain clinical service offerings from Bionano Laboratories effective March 2024. These clinical service offerings from Bionano Laboratories contributed $1.7 million in revenue for the year ended December 31, 2024 and were fully phased out. No comparable revenue was recorded in 2025.

Cost of Revenue, Gross Profit, and Gross Margin

Cost of product revenue decreased by $14.0 million, or 49%, to $14.4 million for the year ended December 31, 2025, compared to $28.4 million for the year ended December 31, 2024. The decrease was primarily attributable to the absence in 2025 of $9.8 million of inventory-related charges recorded in 2024, consisting of $7.2 million for excess and obsolete Saphyr and other instrument spare parts and $2.6 million related to underutilized reagent rentals. The decrease also reflects lower instrument sales, partially offset by higher consumable sales. We expect cost of product revenue to vary with sales volume and product mix.

Cost of service and other revenue decreased $1.1 million, or 54%, to $0.9 million for the year ended December 31, 2025, compared to $1.9 million for the year ended December 31, 2024. The decrease was primarily due to the discontinuation of certain clinical service offerings from Bionano Laboratories effective March 2024. These services were fully phased out by December 31, 2024 and no comparable costs were incurred in 2025.

Product gross profit increased by $13.8 million, or 955%, to $12.3 million for the year ended December 31, 2025, compared to a gross loss of $(1.4) million for the year ended December 31, 2024. The improvement was primarily driven by the non-recurrence of the 2024 inventory-related charges described above and a higher proportion of consumable and software sales.

Service and other gross profit decreased by $1.0 million, or 52%, to $0.9 million for the year ended December 31, 2025, compared to $1.8 million for the year ended December 31, 2024, primarily reflecting the discontinuation of certain clinical service offerings.

Research and Development ("R&D") Expenses

R&D expenses decreased by $13.4 million, or 54%, to $11.4 million for the year ended December 31, 2025, as compared to $24.8 million for the same period in 2024. The decrease was primarily due to decreases of $8.7 million in salaries, wages and benefits driven by headcount reductions announced in 2024 and a decrease of $2.2 million in professional and consulting fees, including decreases in costs incurred to support clinical research studies, development of the Stratys system, foundry expenses, and cloud computing. Lastly, in 2025 we reduced internal consumption of inventory, materials and supplies by $1.6 million and we reduced information technology and rent and facility costs by $0.3 million.

Selling, General and Administrative ("SG&A") Expenses

SG&A expenses decreased by $16.7 million, or 32%, to $35.2 million for the year ended December 31, 2025, as compared to $51.9 million for the same period in 2024. The decrease was primarily due to a $12.6 million decrease in salaries, wages and benefits driven by headcount reductions in 2024; a $8.7 million decrease in professional and consulting fees which is primarily marketing, software, and legal expenses; a $1.3 million decrease in information technology and rent and facility costs; a $1.4 million decrease in depreciation and amortization; a $2.5 million decrease in the losses on disposal of property and equipment recorded; a $0.9 million decrease in travel and entertainment; and a $0.4 million change in the gain on lease modification. These decreases were offset by a $10.9 million gain recorded on the fair value of the contingent consideration due for the Purigen milestones during the same period in 2024 as compared to no gain recorded for the year ended December 31, 2025.

Intangible Assets and Other Long-lived Assets Impairment

The Company recognized no impairment losses on intangible assets and other long-lived assets during the year ended December 31, 2025, as compared to $19.7 million for the same period in 2024. These 2024 losses were due to our restructuring initiatives and change in business strategy announced in 2024. See Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report for further discussion on the impairment charges that were recorded during the period.

Restructuring Costs

The Company had no expenses that were classified as restructuring costs during the year ended December 31, 2025, as compared to $8.0 million during the same period in 2024. These 2024 restructuring costs were the result of our cost saving initiatives.

Interest Income

Interest income decreased by $1.0 million, or 47%, to $1.1 million for the year ended December 31, 2025, as compared to $2.1 million for the same period in 2024 resulting from a reduction in investments offset by higher returns.

Other Income (Expense)

Other income was $5.9 million for the year ended December 31, 2025, compared to other expense of $10.1 million for the year ended December 31, 2024. The year-over-year change was primarily attributable to the following:

See Note 9 (Debt) and Note 4 (Investments and Fair Value Measurements) to the consolidated financial statements included elsewhere in this Annual Report for additional information.

Liquidity and Capital Resources

Since our inception, we have incurred net losses and negative cash flows from operations. We incurred net losses of $26.4 million and $112.0 million, and used $16.3 million and $68.9 million of cash from our operating activities for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $719.6 million, cash and cash equivalents of $3.0 million, $16.3 million in short-term investments and $10.3 million in restricted cash and short-term investments.

Sources of Liquidity and Capital Resources

In the year ended December 31, 2025, we generated cash flows from sales of common stock and other equity instruments. We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments, borrowings from credit facilities and revenue from our commercial operations. See Notes 9 (Debt) and 10 (Stockholder's Equity and Stock-Based Compensation) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for a discussion of our recent debt and equity activity.

On May 24, 2024, we entered into a securities purchase agreement with certain accredited investors (the "Holders") and JGB Collateral LLC, as collateral agent for the Holders, for the sale by the Company in a private placement (the "JGB Debentures Offering") of:

The closing of the JGB Debentures Offering occurred on May 24, 2024. In connection with the closing of the JGB Debentures Offering, the Company received net proceeds of approximately $16.3 million, after payment of placement agent fees, and other offering expenses. The Company used the proceeds received to fully redeem the outstanding balance due under the High Trail Note of approximately $17.6 million, as amended (see further discussion below).

On May 23, 2024, in connection with the JGB Debentures Offering, the Company entered into a redemption agreement with High Trail ("High Trail Agreement"). Pursuant to the High Trail Agreement, the Company agreed to redeem the entire outstanding principal amount of $15.3 million under the High Trail Note at a redemption price of 115% for a total redemption payment of $17.6 million (the "Redemption Payment"). Upon High Trail's receipt of the Redemption Payment on May 24, 2024, the High Trail Note and related Purchase Option to purchase additional High Trail Notes at fair value were cancelled. In addition, the Company agreed to pay High Trail a retirement fee of $2.2 million and to reimburse High Trail for all of its reasonable and documented out-of-pocket expenses incurred with the release and termination of security interests relating to the High Trail Note.

On December 31, 2024, the Company entered into an amendment of the Debentures (the "Amendment") with the Selling Securityholders. Pursuant to the Amendment, the parties agreed that (i) no amortization payment would be paid in December 2024; (ii) the maximum monthly amortization payments due between January 2025 and July 2025 would be reduced from $1.0 million per month to $0.5 million per month; (iii) the maximum monthly amortization payments due from August 2025 through repayment in full of the principal aggregate amount would be $1.4 million per month; (iv) the conversion price of the Debentures would be reduced from $120.00 to $16.20; and (v) the Debentures will become non-callable by the Company until August 2025. As consideration for the Amendment, the Company issued to the Selling Securityholders approximately 83,000 shares of its common stock (the "Private Placement Shares").

As of December 31, 2025, the Company reported $10.0 million of Debentures at fair value, which is classified as current on the consolidated balance sheet. Through December 31, 2025, the Company paid $1.4 million in interest and $4.9 million in principal redemption amounts on the Debentures. As of December 31, 2025, the Company may be required to redeem up to $10.3 million of principal and expects to pay an additional $0.5 million in interest on the Debentures in 2026. See Note 9 (Debt) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for further information.

On January 3, 2025, the Company entered into a securities purchase agreement (the "January 2025 Purchase Agreement") with certain institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market consistent with the rules of the Nasdaq Stock Market (the "January 2025 Offering") (i) an aggregate of approximately 382,000 shares of the Company's common stock, (ii) pre-funded warrants to purchase up to an aggregate of approximately 280,000 shares of common stock (as adjusted for the reverse stock split) (the "January Pre-Funded Warrants") and (iii) warrants to purchase up to an aggregate of approximately 661,000 shares of common stock (as adjusted for the reverse stock split) (the "January Purchase Warrants"). Each share of common stock and each January Pre-Funded Warrant sold pursuant to the January 2025 Purchase Agreement were accompanied by a January Purchase Warrant. Both the shares of common stock and the accompanying January

Purchase Warrants, and the January Pre-Funded Warrants and the accompanying January Purchase Warrants were immediately separable and were issued separately.

The combined purchase price of each share of common stock and accompanying January Purchase Warrant was $15.120 per share (as adjusted for the reverse stock split). The combined purchase price of each January Pre-Funded Warrant and accompanying January Purchase Warrant was $15.119 (equal to the combined purchase price per share of common stock and accompanying January Purchase Warrant, minus $0.001) (as adjusted for the reverse stock split). The gross proceeds to the Company from the January 2025 Offering were approximately $10.0 million (excluding up to approximately $10.0 million of aggregate gross proceeds that may be received in the future upon the cash exercise of the January Purchase Warrants which was contingent upon stockholder approval, which was obtained in June 2025), before deducting placement agent fees and other offering expenses payable by the Company. Each January Purchase Warrant is exercisable for one share of common stock at an exercise price of $15.120 per share beginning on the effective date of stockholder approval, or June 11, 2025, of the issuance of the shares of common stock upon exercise of the January Purchase Warrants (the "Stockholder Approval"). The January Purchase Warrants will expire on the five-year anniversary of the Stockholder Approval. The January Pre-Funded Warrants were immediately exercisable and were exercised in full in January 2025.

On September 16, 2025, the Company commenced a best efforts public offering (the "September 2025 Offering") of an aggregate of (i) 4.925 million shares of its common stock, (ii) pre-funded warrants (the "September Pre-Funded Warrants") to purchase up to an aggregate of 75,000 shares of common stock, (iii) Series E warrants (the "Series E Warrants") to purchase up to an aggregate of 5.0 million shares of common stock, and (iv) Series F warrants (the "Series F Warrants," to purchase up to an aggregate of 5.0 million shares of common stock. Each share of common stock or September Pre-Funded Warrant was sold together with one Series E Warrant to purchase one share of common stock and one Series F Warrant to purchase one share of common stock.

The combined public offering price for each share of common stock and accompanying Series E and Series F Warrant was $2.00, and the combined public offering price for each September Pre-Funded Warrant and accompanying Series E and Series F Warrant was $1.9999. The September Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately upon issuance and will expire when exercised in full. 50,000 of the 75,000 September Pre-Funded Warrants were exercised in full at time of closing on September 16, 2025. The remaining 25,000 September Pre-Funded Warrants were exercised in full in November 2025. Each Series E and Series F Warrant have an exercise price of $2.00 per share and is exercisable immediately upon issuance. The Series E warrants will expire on the five-year anniversary of the date of issuance and the Series F warrants will expire on the eighteen-month anniversary of the date of issuance. The gross proceeds to the Company from the September 2025 Offering were approximately $10.0 million (excluding up to approximately $20.0 million of aggregate gross proceeds that may be

received in the future upon the cash exercise of the Series E and Series F Warrants), before deducting placement agent fees and other offering expenses payable by the Company.

See Note 10 (Stockholder's Equity and Stock-Based Compensation) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for further information.

Based on our current business plans, we will continue to require additional capital in the very near term to fund our operating expenses and capital expenditure requirements, or we may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any. This estimate assumes the inclusion of the amount equal to the outstanding principal amount of the Debentures. Our existing cash and cash equivalents and short-term investments, will not be sufficient for us to achieve cash-flow break even and we expect to need to seek additional capital. Based on the Company's current business plans we believe we will be able to fund our operating expenses and capital expenditure requirements into the first quarter of 2027.

Future Capital Requirements

We expect that our near and longer-term liquidity requirements will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with scaling up our operations and continuing to increase our manufacturing capacity, sales and marketing expense, increasing market awareness of our products and services to target customers, instrument placements with customers via the reagent rental sales strategy, additional research and development expenses associated with expanding and proving the utility of our offerings, expenses associated with continuing to build out our corporate infrastructure, enhancements to information technology, restructuring and advisory fees, and expenses associated with being a public company. We expect such expenditures to continue throughout 2026.

As of December 31, 2025, we had $3.0 million in cash and cash equivalents, $16.3 million in short-term investments and $10.3 million in restricted cash and short-term investments. The amount we are required to hold as restricted cash or restricted investments is equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures. As of December 31, 2025, the Company had $10.3 million of principal outstanding under the Debentures. Based on recurring losses from operations incurred since inception and the expectation of continued operating losses, we anticipate our available cash balance will not be sufficient to operate our business for the next twelve months from the issuance of this Annual Report. Accordingly, we determined that there is substantial doubt about our ability to continue as a going concern within 12 months after the date that the financial statements included in this Annual Report are issued. In order to continue to operate our business beyond that time, we will need to raise substantial additional capital. We are actively evaluating debt and equity financing sources available to us as well as cost reduction strategies, but there can be no assurance that financing will be available on terms acceptable to us, on a timely basis, or at all, or that we are able to effectively reduce our operating expenses. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. Any disruptions to, or volatility in, the credit and financial markets or any deterioration in overall economic conditions may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. If we are unable to raise additional funds through debt or equity financing or other arrangements when needed, we may be required to delay, limit, reduce or terminate our

research and development activities or future commercialization efforts. Even if we raise additional capital, we may also be required to modify, delay or abandon some of our plans which could have a material adverse effect on our business, operating results and financial condition and our ability to achieve our intended business objectives.

In addition, our estimate as to the sufficiency of our current cash, cash equivalents and short-term investments and our current operating plan as discussed above are based on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we currently anticipate. See Note 1 (Organization and Operations) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for more information. If we are unable to continue as a going concern, we may have to reorganize or liquidate our business and may receive less than the value at which those assets are carried on our consolidated financial statements, and investors may lose all or a part of their investment. From time to time, the board of directors maintains a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof: debt financing, equity investments, combinations with other companies, or the sale of all or part of the company. There can be no assurances that any transactions will be available to us or completed and if we are not able to raise sufficient additional capital in the very near term to fund our operation, we may seek relief available under applicable insolvency laws. We do not intend to make further announcements regarding this process unless and until the board of directors approves a specific transaction or otherwise determines that further disclosure is appropriate.

Cash Flows

The following table sets forth the cash flow from operating, investing and financing activities for the periods presented:

Operating Activities

We derive cash flows from operations primarily from the sale of our products and services. Our cash flows from operating activities are also significantly influenced by our use of cash for operating expenses to support the growth of our business. We have historically experienced negative cash flows from operating activities as we have developed our technology, expanded our business and built our infrastructure, and this may continue in the future. As discussed above, we anticipate our available cash balance will not be sufficient for the next twelve months from the issuance of this report. We expect to seek to raise additional capital to fulfill our operating and capital requirements for at least 12 months through equity or debt financings, however, we may not be able to secure such financing in a timely manner or on favorable terms, if it all, and if we are unable to raise sufficient additional capital in the very near term, we may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code. Our recent restructuring activities are anticipated to reduce the cash used in operating activities over the next 12 months; however, our financial condition may result in certain additional restructuring or advisory expenses which may result in our corporate expenditures increasing, potentially materially, and we may observe fluctuations in the cash used in operating activities on a quarterly basis to sustain our current commercial offerings.

Net cash used in operating activities was $16.3 million during the year ended December 31, 2025, as compared to $68.9 million during the same period in 2024. The decrease in cash used in operating activities of $52.6 million was

primarily attributed to a decrease in our net loss and a decrease in our working capital usage as a result of our cost saving initiatives that were initiated in 2024.

Investing Activities

Historically, our primary investing activities have consisted of capital expenditures for the purchase of capital equipment to support our expanding infrastructure, as well as the acquisitions of Lineagen, BioDiscovery and Purigen to grow our business. We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods. During the year ended December 31, 2025, net cash used in investing activities was $12.7 million, as compared to $73.8 million provided by investing activities during the same period in 2024. The decrease in cash provided by investing activities of $86.6 million was primarily attributed to the maturity of $229.1 million in available for sale securities, which was offset by a higher purchase of available for sale securities of $241.9 million during the year ended December 31, 2025, as compared to the maturity of $307.0 million in available for sale securities, which was partially offset by a purchase of $233.0 million of available for sale securities during the same period in 2024.

Financing Activities

Net cash provided by financing activities was $24.0 million during the year ended December 31, 2025, as compared to net cash used in financing activities of $13.7 million during the same period in 2024, an increase of $37.7 million. During the year ended December 31, 2025, the Company made principal payments of $4.9 million towards the JGB convertible debentures, as compared to JGB principal payments, debt extinguishment costs, and retirement fees of $73.1 million towards the High Trail convertible notes payable and purchase option liability during the same period of 2024. These were partially offset by approximately $18.0 million in gross proceeds received from the issuance of the JGB convertible debentures during the year ended December 31, 2024. Lastly we received gross proceeds of $31.1 million from executing sales under our at-the-market facilities with Cowen and Company, LLC ("Cowen") and H.C. Wainwright & Co., LLC ("Wainwright") during the year ended December 31, 2025, as compared to $44.4 million in gross proceeds from executing sales under our at-the-market facilities with Cowen during the same period in 2024.

Capital Resources

As of December 31, 2025, we had approximately $3.0 million in cash and cash equivalents, $16.3 million in short-term investments, $10.3 million in restricted cash and short-term investments and working capital of $22.4 million. The amount we are required to hold as restricted cash or restricted investments is equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures (as defined in Note 9 (Debt) to our consolidated financial statements). As of December 31, 2025, the Company had $10.3 million of principal outstanding under the Debentures.

In order to fund our future operations, on March 10, 2023, we filed a universal shelf registration statement (the "Shelf Registration Statement") with the SEC, which provides for aggregate offerings of up to $400.0 million of common stock, preferred stock, debt securities and warrants or any combination thereof. We also previously had in place a Sales Agreement with Cowen (the "Cowen ATM"), as amended, pursuant to which we were permitted to offer and sell from time to time shares of our common stock having an aggregate offering price of up to $200.0 million through or to Cowen, acting as sales agent or principal, pursuant to the Shelf Registration Statement. In January 2025, the Company sold approximately 0.1 million shares of common stock under the Cowen ATM and received gross proceeds

of approximately $1.9 million before deducting offering costs of $0.05 million. On February 4, 2025, the Company provided notice of its termination, effective February 14, 2025, of the Cowen ATM.

On February 21, 2025, the Company entered into an At The Market Offering Agreement (the "ATM Agreement") with Wainwright, pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $75.0 million, through or to Wainwright, acting as sales agent or principal, pursuant to the Shelf Registration Statement. From February 24, 2025 to December 31, 2025, the Company sold approximately 3.0 million shares of common stock under the ATM Agreement at an average share price of $3.06 per share and received gross proceeds of approximately $9.2 million before deducting offering costs of $0.3 million.

On March 31, 2025, the date we filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our public float was less than $75 million. As a result, we became subject to the offering limits in General Instruction I.B.6 of Form S-3. Pursuant to General Instruction I.B.6 of Form S-3, for so long as our public float is less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to one-third of our public float. If our public float increases or decreases, the number of securities we may sell under our shelf registration statements in accordance with General Instruction I.B.6 of Form S-3 will also increase or decrease, respectively. If our public float increases above $75.0 million such that we may sell additional amounts under the ATM Agreement and the ATM Prospectus, we will file another amendment to the ATM Prospectus prior to making additional sales in excess of the limitations of General Instruction I.B.6 of Form S-3.

Contractual Obligations

The following table summarizes our future cash outflows for contractual obligations as of December 31, 2025.

Operating lease obligations relate to our office, laboratory and manufacturing space for our corporate headquarters in San Diego, California. Finance lease obligations relate to our BioDiscovery office in El Segundo, California. See Note 11 (Commitments and Contingencies) to our consolidated financial statements included elsewhere in this Annual Report.

Critical Accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. We have discussed the development, selection and disclosure of the accounting estimates with our audit committee. We believe that the estimates, judgments and assumptions are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. Historically, revisions to our estimates have not resulted in a material change to our financial statements. While our significant accounting policies are more fully described in Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report, the significant accounting estimates that we believe are important to aid in fully understanding and evaluating our reported financial results include the following:

Valuation of Long-Lived Assets (including Finite-Lived Intangible Assets)

Long-lived assets are reviewed for impairment if indicators of potential impairment exist. If the Company identifies a change in the circumstances related to its long-lived assets, such as property and equipment and intangible assets, that indicates the carrying value of any such asset may not be recoverable, the Company will perform an impairment analysis. A long-lived asset is not recoverable when the undiscounted cash flows expected to be generated by the asset (or asset group) are less than the asset's carrying amount. Any required impairment loss would be measured as the amount by which the asset's carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and a charge to operating expense. If a fair value assessment is performed, the evaluation includes a discounted cash flow method to estimate the fair value of the asset group. The cash flows were determined using market comps obtained from similar asset groups and includes estimates and assumptions for future sublease rental rates that reflect current sublease market conditions as well as discount rates. Refer to Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report, for further information on the impairment losses we recorded to our long-lived assets and intangible assets as of December 31, 2025 and December 31, 2024.

Convertible Debentures Payable

As described further in Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report, the Company elected to account for the convertible debentures payable issued using the fair value option under ASC 825-10. Such instruments are recognized at estimated fair value on the date of issuance, with changes in fair value after issuance recorded in other (income) expense, net on the consolidated statements of operations as a gain or loss, unless the change is a result of a change in credit risk, in which case such change in estimated fair value is recorded within other comprehensive income.

Increases or decreases in the fair value of the convertible debentures payable can result from updates to assumptions such as the expected timing or probability of a qualified financing event, expected volatility or changes in discount rates. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period. Updates to assumptions could have a significant impact on the Company's results of operations in any given period.

Allowance for Excess and Obsolete Inventory

Provisions for slow-moving, excess, and obsolete inventories are estimated based on product life cycles, historical experience, and sales forecasts. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory with a corresponding adjustment to cost of sales. If we are able to sell such inventory, any related reserves are reduced in the period of sale. The Company's allowance for excess and obsolete inventory was $3.0 million and $3.8 million at December 31, 2025 and 2024, respectively. A 10% change in our reserve estimate in total at December 31, 2025 would result in a change in reserve of approximately $0.3 million. Our reserves are estimates which could vary significantly, either favorably or unfavorably, from actual results if future economic conditions, consumer demand and competitive environments differ from our expectations.

Recent Accounting Pronouncements

See Note 2 (Summary of Significant Accounting Policies), in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for information concerning recent accounting pronouncements.